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Can a subsea tunnel link Newfoundland with Labrador? It’s a $750K question

The tunnel would connect about 26,000 residents of the mainland with the island of Newfoundland but critics question plans to spend up to $750,000 for another feasibility report.

Critics question plans to spend up to $750,000 on a feasibility study for a subsea tunnel link between Newfoundland and Labrador. (Dick Loek / Toronto Star file photo)

By Sue BaileyThe Canadian Press

Thu., Dec. 8, 2016

ST. JOHN’S, N.L.—Could a subsea tunnel under the Strait of Belle Isle finally link northern Newfoundland with Labrador?

It’s a question that for decades has inspired dreams of free-flowing trade, hundreds of jobs and thousands of tourists.

Proponents say a fixed link — like the Chunnel between the U.K. and France, or the North Cape Tunnel in Norway — would unleash economic opportunity.

“It could, theoretically, be a game changer,” said Des Whalen, chairperson of the St. John’s Board of Trade.

But the idea is making political waves in the cash-strapped province, as critics lambaste plans to spend up to $750,000 for another feasibility report.

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“At a time when funding is being slashed all over the place for important programs, I really question the wisdom of spending three quarters of a million dollars,” NDP Leader Earle McCurdy said in an interview.

“Even if the study comes back and says, yes, this is feasible, we’re not in a financial position to do the project any time soon.”

The tunnel under the strait, which is roughly 17 kilometres at its most narrow point, would connect about 26,000 residents of the mainland with the island of Newfoundland.

But McCurdy and other doubters stress the province is in the midst of a fiscal crisis since oil prices collapsed. Despite spending cuts and tax hikes, a $1.6-billion deficit is forecast this year as net debt mounts.

That’s on top of soaring costs linked to the Muskrat Falls hydro project now under construction in Labrador. Its estimated price tag has hit $11.4 billion, up $4 billion from four years ago.

The Liberal government says it earmarked $750,000 for the Labrador link study in its last budget as part of economic diversity efforts, but none of it has been spent.

Progressive Conservative member Barry Petten says a study commissioned more than 12 years ago by the previous Tory regime already recommended a single-lane tunnel that would move vehicles one way at a time on an “electric train shuttle.”

But with an estimated cost of $1.7 billion with financing — and 11 years for development — the project stalled. It never progressed despite years of hefty surplus budgets flush with offshore oil revenues.

“People wanted to make this work in 2004 and 2005,” Petten said in an interview. “At the end of the day, they just couldn’t make it feasible. I don’t see what has changed now.”

People familiar with the study led by former engineering consulting firm Hatch Mott MacDonald are baffled by the latest move to revisit it, he added.

“They were a bit astounded why you’re going to spend $750,000 in this financial climate on a study that has really already been completed but just needs minor updates.”

Businessman Danny Dumaresque, a former provincial Liberal party president, said that research is outdated and never examined a proper business case.

He has been a vocal backer of the Labrador tunnel concept for years. As with the Confederation Bridge in P.E.I., Dumaresque believes private investors could be found to finance a venture that would eliminate escalating ferry costs while generating big profits over time — at no public cost.

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